Last week, the biggest trade groups representing the American brewing and distilling industries got into a public quarrel over how much High Noon you’re drinking. I regret to inform you that drinking itself could hang in the balance. What? No! …Sort of? Let’s discuss, reader.
This internecine inter-industry spat began last Thursday morning, when the Beer Institute (BI) launched a new consumer-facing website to “promote moderate consumption and nutritional transparency” and “she[d] light on how large liquor companies inflate their bottom line by exploiting loopholes in our tax code.” The site, StandWithBeer.org, has a bit of a mullet thing going on. It’s all business up front, touting the millions of jobs created and economic impacts, erm, impacted by United States breweries. But the party — at least as far as your humble Hop Take columnist, hankering for some good ol’-fashioned beverage-alcohol drama, is concerned — takes place a few scrolls down the page, where the BI gets into its promised light-shedding with posts detailing various quirks of the U.S. tax code that it says unfairly favor full-proof hooch producers.
The overarching premise of StandWithBeer.org is that beer is beer, liquor is liquor, and centuries of legislative and cultural precedent dictate that ne’er the twain shall meet. The beer industry, in its magnanimity, would gladly have adhered to that detente into perpetuity — but with the “multi-billion-dollar liquor conglomerates … trying to blur the lines surrounding canned cocktails,” the BI had no choice but to take a stand. And now, they’d like the American drinking public to stand with them.
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Strong stuff! But not quite as strong as the swift response from the Distilled Spirits Council of the United States (DISCUS), whose president, Chris Swonger, lamented that his lower-ABV colleagues would take such shots at shots. “It’s unfortunate big beer companies would stoop to the level of using misleading information to attack the spirits sector and its consumers, rather than investing in beer products that consumers actually want to buy,” he said in a brief June 22 statement issued mere hours after the BI’s site went live.
Look, this is a beer column and all, but that’s a point for spirits from where I’m sitting. Why debate the vagaries of taxation when you can simply dunk on your competition instead?
Make no mistake, the constituents of BI and DISCUS are competing. Hardly a week goes by here at HQ that we don’t mention one of the fronts of that war: tax equivalency, premiumization, distribution shuffle-ups, and so forth. As the hard seltzer boom gave way to all manner of fermented alcopops and spirits-based ready-to-drink beverages, the lines have indeed gotten blurry. DISCUS has pressed the advantage accordingly, lobbying lawmakers in states across the country for more market access and more favorable tax statuses. Whether that campaign, which has been hit or miss so far, has hastened along spirits’ encroachment on beer’s market share, or drinkers’ tastes and preferences are simply shifting in distillers’ direction, is hard to say. But it’s certainly happening, pretty much anywhere you look. Earlier this year, DISCUS announced that the spirits industry overtook beer’s overall market share in dollars (but not volume, as the BI quickly pointed out) in 2022; a Brewbound analysis of NielsenIQ’s hard seltzer scan data this month indicates that only spirits-based versions of that beverage are growing — and they’re growing to the tune of 66 percent year-over-year.
That’s where things stand with the Beverage-Alcohol Trade Group Battle Royale for now. I encourage both parties to continue launching websites and lobbing insults at one another for our amusement. But in the meantime, let’s consider the historical significance of these two industries taking their pissing match public. Until now, such skirmishes have mostly taken place out of view of John Q. Guzzler, in statehouse lobbies, wonky policy memos, and the business press. In taking an anti-liquor case directly to rank-and-file drinkers, the BI has publicly emphasized a fracture with DISCUS that belies the common cause the two orgs found getting the Craft Beverage Reform and Tax Modernization Act across the finish line in 2017 (and defending it in 2019). But StandWithBeer.org also harkens back to a much earlier fissure in the beer-liquor detente, one that may have abetted the rise of the temperance movement and the passage of Prohibition.
Midway through the 19th century, brewery owners formed the United States Brewers Association (USBA) to coordinate political action and protect their interests in Washington, D.C. As teetotaling “drys” gained momentum, the org wasted little time trying to create daylight between itself and the monied “liquor interests” that plied Americans with distilled spirits. “The rhetoric in the USBA was always very, very willing to sacrifice their distilling ‘partners-in-crime,’ so to speak, in order to appease the temperance people [because] they believed that beer was exceptional,” says Brian Alberts, Ph.D., the beer historian behind Brewed Culture. He tells Hop Take that the language on the BI’s website today closely echoes the messages that the industry promulgated via political ear-bending and mass-printed pamphlets nearly two centuries ago.
“On the StandWithBeer website, [the BI is] saying over and over that policymakers have always recognized that beer and liquor are not the same. That is basically a line that’s been going on since literally 1862” when the USBA was first formed, says Alberts. Another echo of the past can be heard in the site’s references to “foreign liquor producers.” The term evokes a bit of the nativist prohibitionist sentiment that the USBA was keen to redirect away from its many German-American constituents and toward “large corporate [distilling] conglomerates run by anonymous managers on behalf of stockholders,” as historian Maureen Ogle called in her seminal beer-industry history “Ambitious Brew.”
The USBA’s goal, Alberts says, was to frame beer as a wholesome “national drink … the true temperance drink” because of its relatively low alcohol content compared to hard liquor. As dry groups like the Anti-Saloon League and the Women’s Christian Temperance Union ratcheted up their attacks on the two industries in the late 1800s, the USBA (which was not primarily a public-relations outfit, Alberts emphasizes; neither is the BI) began printing its own public-facing literature extolling some of the very same merits of beer that StandWithBeer.org does today. “Obviously, the specific points are changed,” says the historian. But the “three pillars” of the USBA’s case — the industry’s economic impact, the premise of moderation, and the aura of nourishment — are easy to read into the BI’s own consumer-facing advocacy literature, he argues.
I agree. But so what? Happily, though the historian sees strong parallels between the beer industry’s pitch to drinkers then and now, today’s regulatory landscape looks nothing like the one that emerged in the 50 years prior to Prohibition. “It’s just not the same extremes of industry activity and reform activism that you saw” by the 1910s, Alberts says. And while he allows that infighting between the beer and liquor industries in the 19th century was “a factor to an extent” in hastening the ratification of the 18th Amendment, it was just one among many. In other words, just because BI and DISCUS have begun sniping at each other before God, man, and all of social media doesn’t mean America is headed back to the dark ages just yet.
Then again, as Ogle argued in “Ambitious Brew,” a key factor in the drys victory was that “brewers and distillers refused to acknowledge the enemy at the gates.” There’s probably a lesson there — but I’m not sure today’s brewers and distillers, hard at work making beer look more like soda and vodka-soda look more like juice, are ready to learn it just yet.
🤯 Hop-ocalypse Now
Roughly five months after workers at Creature Comforts Brewing Co. went public with their union drive at the Athens, Ga., firm, they’re still fighting for certification — and the battle is heating up. The Brewing Union of Georgia is now alleging that the company (the country’s 37th-largest craft brewery by volume in 2022, according to the Brewers Association) fired a pro-union worker in retaliation for supporting the drive earlier this month. If the National Labor Relations Board finds in the union’s favor, the worker could be reinstated, and the brewery could face penalties… but any such investigation would take months, highlighting yet another reason it’s very hard to unionize a craft brewery.
📈 Ups…
Monster is launching a Twisted Tea challenger called Nasty Beast, proving once more that the bigger they are, the harder they’ll tea… Americans be buyin’ beer for this Fourth of July at a rate 31 percent higher than 2022, wowza…
📉 …and downs
Anheuser-Busch InBev’s North American CEO Brendan Whitworth did his first TV interview since the Bud Light debacle began three months ago, and biffed it… Canopy Growth, the cannabis firm Constellation Brands bought into in 2017, is now struggling to survive despite a one-time $19 billion valuation…
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